In a supply chain network, a warehouse plays a vital role in receiving and supplying the right product, at the right place, at the right time for many years. It is evident that globalization and emergence of Omni-channel e-commerce platforms have significantly increased the role of the warehouse in the supply chain network. As the warehouse has become essential in the supply chain network, it becomes very important to address the challenges hindering optimal performance in managing the supply chain network. One of the major pain points in optimizing the utilization of space of the warehouse is confronting third-party logistics providers (3PLs) reserving location and/or slots in the warehouse for the utilization of space inside each location and thereby placing the products in the reserved slots based on demand of the product in the market. Improper utilization of the space impacts major areas of operations. Some of the areas of operations may include, but not limited to, scope for increasing the business revenue, lack of visibility on partially utilized locations resulting in poor result warehouse occupancy rate, stock turnaround ratio of the warehouse is affected due to improper utilization of the space, lack of space in the warehouse delays vehicle offloading at the receiving operations, offloading delays lead to increase in vehicle halting hours and vehicle turn-around time.
In addition to the above, in most warehouses where there are little or no efficient operational processes, the operators store the products wherever they find the first available home and in such environment there is little reason to predict as which product should go where within the warehouse. There are still many warehouses that merely use simple spread sheet based processes for slotting and it is reasonable to some extent as long as the warehouse is small and running on lower volume. But as the size of the warehouse, volume and the product families' increase, an advanced slotting tool is necessitated in order to gain the maximum out of the existing provisions, especially in the ever growing margin pressures and the competitive nature in retaining the customers in the warehouse.